Bitcoin Forum

I have read that concerns over hoarding BTC can be alleviated by more people accepting BTC. But why should I? Why should I accept your BTC as payment for something in leiu of something like a goldgram?

Please, if you can, explain WHY. I have noticed that when discussion of gold comes up here on this forum people seem to ask pointed questions in response to why BTC is as legitimate or even better than gold as a currency without actually constructing a solid point.

Because you can send it instantly over the interwebz?  Because you can store all your wealth on the back of a stamp?  Because it isn't practical to pay someone $1 or $0.50 worth of gold, but you can pay bitcoins in any fraction you like.

That's all I can think of.  :)  But mostly being able to send it online and anonymously.

It's better to accept two payment methods rather than one. Some people have gold but no BTC. Some people have BTC but no gold. You expand your potential market by accepting either.

Those services are centralized in that you HAVE to go through a 3rd party that has absolute control over account and balance. Simply put, it's not easy to hold "digitalized" gold, and it creates a security gap. Bitcoin goes around that, since it's digital to begin with. Bitcoin also has the potential to turn into a currency as is, when gold needs that digital layer.

With a goldgram it is not very difficult for me to sell my gold for money, then send the currency I traded it for to a person on the internet.

Storing my gold on the back of a stamp? Is this really WHY I should start accepting your BTC? I should do work for you in BTC because I can "store my wealth on the back of a stamp"? What is this supposed to mean to me? It means nothing. Please explain further.

It isn't practical to pay someone in small amounts of gold? Sure, maybe for a buck or half a buck, there might not be a more convenient way to pay someone. But is this really supposed to allure me into accepting BTC for labor? If I need to pay someone a buck or two, I will just pay them a buck or two. I do not see what advantage BTC has over USD in this regard.

What benefit is there to conducting my transactions anonymously online?

How much does it cost me to generate BTC? Surely the lack of an exchange is a severe disadvantage for the currency. How am I supposed to negotiate payment in exchange for my time and labor for BTC when there is simple way to discover a price? How am I supposed to know what stores are accepting in BTC as market conditions change?


A payment in a commodity that has no known exchange rate for any given time. A commodity that is very new and its future uncertain to those new to the BTC.


So you say BTC is more "secure"? Tell me again why this security is so much better than trusting a DGC service, even though BTC has no exchange and prices cannot be determined by market participants nearly as easy as gold or silver.

I do appreciate all of your input on this subject so far and I hope that you continue to participate in this discussion.

Well why would you accept a goldgram? What sort of properties of that commodity draw you to buy it and trade in it? I don't know about you but I imagine what those properties might be and for me Bitcoin has the same crucial properties and a few extra and that's why I use it.

Lets talk about this:

http://blog.bitcoinwatch.com/wp-content/uploads/2011/05/BTCUSD20110512hourlylog.png

Is this a price chart for BTC? How do they determine values like this? Is there an exchange built right into BTC?

Because I believe gold's role as a currency for so long adds to its reputability. Gold prices can be determined easily in our modern era with supply and demand for the commodity, as price fluctuations can be ascertained to a degree by observing the marketplace. Gold can also be liquidated almost anywhere in the world. I can pay for things in gold with the buyer and seller knowing exactly at any given time the value of the transaction against dozens of different commodities, equities or currencies.

Does BTC has these qualities? It obviously is not time tested as gold is, but what about the other points.

Edit: I have edited my post to add a few lines, I apologize if you missed it.

That's long term uncertainty. Take payments in BTC, sell the BTC in the short term and make your prices reflect that uncertainty. Then, if/when BTC crashes, it won't matter. It's fairly straightforward. You expand your market by accepting more than one method of payment.

Are you actually running a business that this would apply to or are you just looking for a debate?

I don't own any BTC and only heard about it last week. I came here because I wanted to see what the likely economic discussions were regarding BTC and other asset classes.

I DO own many USD which over the past five years or so I have been steadily trading for other things that will appreciate more, such as equities and commodities. Basically beyond paying for groceries and utility bills, USD serves basically two roles for me: to trade for gold equities and commodities, and to pay for things in the remote chance that my credit cards are declined. So as far as short-term currencies go, I am not really interested in holding things short-term unless I want to speculate, but there doesn't seem to be much opportunity to speculate in BTC.

I have read some of the posts on here regarding anticipated problems concerning the longer term viability of BTC, but I am still left wondering why I should accept BTC as payment for something. If you can pay me in USD, CAD, AUD, or gold or something, then why should I choose BTC over any of those other items?

EDIT: I mean it seems to me that basically it boils down to confidence in the currency to stay viable over the long-term. And since newcomers are not going to instantly understand the cryptopgraphic principles behind BTC, why do you expect that this will continue to grow?

Because the DGC provider of your choice can chose tomorrow to freeze your account, let's say because some government felt like getting in the way at a whim. With BTC, your wealth is in your wallet and no one can do a thing to it. To use DGCs, you have to go through a middle man. That middle man is a single point of failure, because he has full control over your entire deposit. With BTC, there is no need for a middle man, for BTC is naturally digital. This avoids that single point of failure case.


That is true, for the BTC market is still quite thin. It still needs time to grow. That's a disadvantage. The advantage is that this growth holds a much higher potential for appreciation than gold does, since gold has already spread to its full market capacity. Technically, you'd be willing to sacrifice convenience for more security and the chance to get a great return on investment for simply sitting on your wallet.

As such, you should consider keeping a little of your wealth in BTC, let's say 1-10%. If you find it to eventually suit your expected level of convenience and usability, you can then start to move more of your wealth on the system.

well, actually BTC would fall under the or something category, so you don't choose it over any of those, it IS one of those.

what if i don't own any USD or CAD or AUD or gold, but BTC? (actually, the only USD i currently have are on MtGox, never had any CAD or AUD or gold, ever)
don't want me as your customer? fine, i'll find another seller who wants my BTC then.

I hate to sound like a broken record but again, adding one more method of payment expands your market. I'm not suggesting you forsake all other forms of currency for BTC or even prefer BTC over anything else. I am only suggesting that you should accept BTC as payment because you can stand to make extra revenue that you would not have made before, especially if you have something that appeals to the Bitcoin crowd or isn't currently being offered.

If I make a transaction in BTC and the seller does not deliver, what recourse is there?

Where can I find a list of stores accepting BTC?

You need to check out www.mtgox.com if you think there isn't ample opportunity to speculate in bitcoins.

Why not pay in USD?  Uhhh, good question.  I think the idea is that USD is an inflationary currency controlled by the government, and not many people here like the idea of their money being devalued at the whim of the government.  Also, anonymity, though you already mentioned that that wasn't an important factor for you.  Also, easier to do.  You can send USD with services like Paypal, but it can be complicated, and you can get chargebacks as a seller, etc.  Mostly it's the lack of central control - that no one else can add money to the supply at any time.  It's completely secure in that manner, in that there will never be more than 21 million coins in total.

Why not pay in gold?  Because not very many people accept straight-up gold as payment anymore.  Because it is difficult to know the exact value of the gold you hold.  Because you have to go through the whole process of selling gold, getting your gold verified, getting a goldgram, sending said goldgram, etc.  Bitcoin is EASY.  You just copy/paste an address you want to send bitcoins to, enter the total number to send, and bam.  You're done.

Back of a stamp?  Well, basically what I mean is, your entire private key for your wallet can be stored in a very small digital (or analog, if you choose) space.  I was kind of making a jab at the Mission Impossible movies though, where they store some sort of digital medium on the underside of a stamp on a postcard.

You can use a service like clearcoin to ensure the seller delivers.  If they don't, you can have the funds refunded to your account.  Of course, this poses a risk to the seller as well...

Is this a recommendation to trade USD for BTC? I mean, there is a difference for a new comer between letting BTC generate and actually trading currency for BTC. For example, I do still do not understand the long-term viability of BTC, how prices are determined, and how anyone can predict the future success of BTC. If people generating BTC do not grasp each of these subjects then how long would you expect for BTC to deliver a greater return than gold? What is the time horizon for this?

There are no chargebacks. Either insist that you receive the goods before sending BTC or use an escrow service if you don't want to expose yourself to that kind of risk.


https://en.bitcoin.it/wiki/Trade

Bitcoin2cash gave the correct answer.

I notice on that website they allow users to trade in dark pools. This basically allows for large transactions to occur without sending a corresponding price signal to other market participants. How exactly is this beneficial to the market as whole, as opposed to those in the dark pools?


I accept your opinion that USD is not a good store of value. As I said earlier, USD is basically a short-term currency for me as I am more interested in purchasing equities and commodities as stores of value. In this respect, USD seems to be a superior choice for a short-term currency because it is accepted is many more places than BTC, it is readily recognizable to basically everyone on the globe, and it can be transacted easily in physical form without a need for computerized devices.


Not many people in countries that have been dominated by banking and mortgage markets. For example I can buy a very, very nice property in Viet Nam with a very large amount of open land for just few gold coins. The value of the coins can be easily determined by looking at central exchanges located in any number of different cities on the globe. It is not the fault of gold that Westerners do not know the value of it and I would not consider that a weak point against gold.

What do you think is the best way I can trade my BTC for the same property in Viet Nam? What angle should I use?


How does clearcoin operate and how do they verify transactions? What kind of a commission do they charge?

Guys I just want to say again how much I appreciate your help and input. Please know that I am grateful.

Yes.


Mining is a different approach to entering the BTC market. It is highly profitable right now, but it takes some time to set it up and get it running and requires rapidly depreciating computer hardware to run it, not to mention it his highly competitive. It is simply easier and faster to buy some BTC.

Also anyone who bought BTC in early April is looking at much higher profits (3-4 times) than those who spend the exact same amount in mining rigs.



BTC as a store of value has the same properties as gold, it thus naturally attracts anyone who can appreciate the qualities of gold. It offers those qualities in a different aspect, mainly that it is fully digitalized. That's the "sales pitch" to gold bugs. It is expected that anyone who values gold will value BTC for the same reasons, and part of those people will want to buy into BTC for the digital aspect. This is only considering BTC as a store of value. If some vendors start supporting it, then the sky's the limit.

Given these points, the more BTC is publicized, the more newcomers show up wanting to buy some, and the higher the exchange rate goes. As long as BTC doesn't encounter a major system failure, there is nothing to stop it from growing.


Gold appreciates like 1% a month right now I think. From my own estimate, gathered from the recent press hits and the upcoming CIA conference in June, I'd expect BTC to be around $15 at least by early July. Considering it's waving around $6~$8 right now, that's about double in value. But don't take that for granted, it only my humble guess, establish your own estimate from the informations you gather.

DERP, I suppose what we're getting at through the course of this conversation is that BTC is a currency in its infancy.  There are really only two reasons one should use it as a currency at this moment:

- You dislike centralized/governmental currencies, and would like to see bitcoins replace them all, so you are willing to put the effort into making as many transactions with bitcoins as possible, in the hopes that it will help stabilize and promote the currency.
- You are a speculator, and are actively using it to make money through speculation, investments, and other related transactions.

It is a HOPE that bitcoins will achieve the same or greater level of usage and usability as something like gold does.  It's not there yet, not even close.  But it is growing stronger and more usable every day.  It's just not to the point where it can compete with other currencies out there, but it CAN compete with other currencies if more and more people keep using it.

BTW, there is a way to physically exchange bitcoins too - look at www.bitbills.com

Excellent post goatpig, thank you very much for your reply. I may ask you more questions about what you said later, but I want to talk more about this Mt. Gox website and dark pool trading.

Do you or does anyone know a lot about Mt. Gox and BTC trading, specifically in dark pools for large amounts of BTC? Basically is there anything from stopping me and some other large volume BTC traders (if any exist and I can contact them) from allowing reciprocal access to our dark pool trading information and localizing liquidity during certain market conditions? This seems to be a bit unfair to everyone else, but if there are no rules preventing this then why not?

Anyone who is interested in colluding or knows more about this subject please do not hesitate to contact me privately.

There's the OTC (over the counter) channel on IRCfreenode with a web of trust application attached to it. Some of the most trusted traders over there have a lot of BTC on their hands. It's probably the second best place after MtGox to get ahold of BTC and it's definitaly further away from the spotlights than Gox.

Hi DERP,

The stamp comment was meant to point out how btc has one of the good properties of gold in the extreme. You can put a million dolars worth of gold in a backpack, but you can put a million dollars worth of bitcoins onto a <1gram SD card.

Bitcoin doesn't have an exchange built in, really nothing does. For a lot of things there is one major marketplace, for bitcoin right now that is mtgox.com. No matter what the price is there though you can choose to sell your coins or not at whatever price anyone offers you. Mtgox is just a place where people make offers to each other.

The reason people value bitcoin so much is for a lot of the same reasons people value gold. They are both durable, divisible (bitcoin more easily so), transferable (bitcoin more so), fungilbe, and scarce. For different scenarios one or the other is more suitable, I have both. For most of what I do though Bitcoin makes more sense.

What is the channel name? I tried #OTC, but there is just one person in there.

Dark pools are no problem. If it hasn't been said yet, dark pool trades on Mtgox are shown after they happen, just not before. This is more transparent to you than when someone PMs me and I make a sale to them. In that case you never see anything about the trade and that's fine because it's not your business to know what everyone is doing. There are pros and cons to making offers in private vs public. Neither chose hurts people, but public offers do help people a little in that they get an extra opportunity and a little info.

#bitcoinOTC on IRCfreenode if I recall correctly

#bitcoin-otc

There's no charge to receive Bitcoin. If people want to pay a transaction fee, that's up to the buyer.

There's also no charge to store Bitcoin. EGold has a storage fee.

I haven't read the entire topic, I'm just answering directly the OP. The following charts should make it pretty much clear why you would prefer using BTC instead of gold:

http://static.safehaven.com/authors/watson/3412.gif

http://upload.wikimedia.org/wikipedia/en/5/54/Total_bitcoins_over_time.png

That's the most important, but besides that, there are the advantages others explained already, mainly the fact that bitcoin is decentralized by design. To accept gold payments, you either have to trust a third party - which will probably be vulnerable to a government, and then bye bye privacy/security - or you'll have to accept physical gold plus silver and copper for small changes, meaning you'll have to find ways of protecting this physical gold, not to mention the hassle and limitations (cost!) on transportation.

Protecting data is certainly easier (cheaper!) than protecting anything physical. Data may be backed up, a physical commodity cannot, meaning if your safe gets destroyed, you lose. Data may be encrypted, meaning that even if someone has access to it, he would also need a password. And with the existent techniques to create hidden encrypted volumes, even torturing you to get the password may not be enough to get everything you have.

So I've got like $5000 saved up so should I put i all into bitcoin

Gotta decide for yourself. But make sure you understand as much as possible and are comfortable or you are going to screw yourself by panicking on any downswing. No need to do it all at once either.

It would be unwise to put all your eggs in one basket.

Yeah but they're already in one basket (in the dollar basket)

As with any investment, there is a certain amount of risk involved. Most here believe bitcoins will appreciate in value and would advise in favor. Then again, if we felt otherwise, we probably wouldn't be here.  :)

Derp, i'm a fellow gold/silver bug that started buying in 2005.  i am a former Goldmoney goldgram holder.  i closed that acct a couple of yrs ago.  hard to wire money to Jersey Island and gov't will limit expatriation of money.  still own bullion but sold off a bunch to buy btc.  also shorted recent silver ramp.  i believe its too difficult for bullion to conduct intl trade.  old concept.  need digital currency to move at light speed.  i'm a believer in tech and the internet.  btc is a 21st century concept.

This is a frequently overlooked point.

A related fantasy is that no profit is real until you convert it to dollars.

the btc economy has exploded and is moving much quicker that pm businesses.  much faster and easier than pm's.

the exchange price of pm's is hardly realistic with all the manipulation by JPM and GS as u know.  huge distortions with all the paper pm's like SLV/GLD.  we do have an active mtgox exchange.  not perfect but not bad.

in comparison to USD, btc's will level off in supply which will at the least stabilize if not increase their value. 

i agree, the dark pools should be eliminated.  still, btc is not a manipulated mkt like the USD or pm's

If the BTC economy has exploded wouldn't there be more than like 30 places on the internet that accept it?

Is there a central place where we can go to new show stores opening up or accepting BTC showcased? How often do no BTC accepting stores become available?

What risk could there possibly be? One guy in here told me that BTC will have a better return than gold!

You know, I was asking about this yesterday in a few different places and basically what people told me was "yeah, it can be used to manipulate the market, but the liquidity it provides more than makes up for it" now gee where have I heard that before?

it already has!

look at the btc wiki for a list.  i've also come to the conclusion that a large economy might not necessary for btc to grow in value as long as the algorithm stays as is.

For you maybe, but not necessarily for the new coming.

What exactly do you think is driving the price up? I mean, I don't really see new bitcoin stores opening all over the place, just the small number of the list posted above.


I already referred to the list, but the point was that how is it supposed to function as a currency if there are only a tiny, tiny, tiny, tiny number of stores willing to accept it. I think people forgetting that this is supposed to be a currency, not really an investment. (Or maybe to other it is supposed to be investment, but as currency it's not really good to have such a small people using it was a currency and the vast majority speculating in it.)

What is stopping from me wash trading BTC?

There's also herd mentality: Everyone is in dollar, so if Titanic sinks, that's okay, I am not alone. Jumping to a smaller ship? no thanks.

It's new. Stores aren't going to all start accepting Bitcoin immediately. Some might want the exchange rate to settle down. Some might not have the technical know how. Some haven't even heard about Bitcoin yet. Etc.

It is growing though. So, we shall see.

Well is there a place that actually does showcase NEW stores?

I mean, yeah, I can look through that list every week, but I won't necessarily notice when new shops pop up.

If such a place exists, I don't know about it.

Yep it is natural, but scary when you think closer though. If I go broke alone there are people around to help me, but if we all go broke together we're super screwed.

It would be cool to date new merchants so we can see growth easily.

I'd guess the number of new this month is the same as the number up until this month.

Each one used to be news and get me excited, but now they just keep coming.

Yeah second this. I want to see growth. Just having a list of 30 stores or whatever for your new currency is pitiful, but it might not look that way if there is rapid growth.

Nothing, since you have multiple addresses.  There is nothing illegal or immoral about moving your Bitcoins between them.

Really, there's nothing immoral about trading something back and forth to try to drive up price and activity for the sole purpose of taking advantage of other market participants who don't know what you're doing?

Yes, really.  There's no inherent relationship between price and volume.  You take the risk by inferring one.  Market data is not guaranteed by anyone.  No one else can decide for you what price you are willing to pay for something, be it Bitcoins or bread at the grocery store.  If the price is too high, don't buy it.

What exactly do you think drove the price of gold up? I mean, I don't  really see any stores out there accepting gold as payment...

Certainly not neckbeards thinking they're going to get rich by sitting at their computers. There is an increased demand for commodities gold in particular because there has been an excess of dollars put into the economy.

Is that why you think Bitcoins are going up? Because people want out of the dollar? Is that why you answered my question with yet another question? Gold didn't just pop up last week through a computer program set to "generate gold". There is definitely a confidence disparity between the two.

See my first two posts on this thread, please.

I think it speaks for itself when members of the Bitcoin community think outright deception and market manipulation is not immoral. You're essentially tricking people into paying higher prices for your own benefit. Compared to the small number of stores accepting Bitcoin, how can this prosper as a currency is so many people are using not as an actual currency, but just as yet another speculative, rigged market?

You linked to charts of gold production over a period of time and Bitcoin production over a period of time and inferred based on these two charts that I should buy Bitcoins over gold. Well here is a similar chart I came up with, only it projects out to a much further period of time. What do you think? Is it a good time to buy?

http://img818.imageshack.us/img818/1875/toiletpaper.png (http://imageshack.us/photo/my-images/818/toiletpaper.png/)

DERP, your question was answered three times on the first page of this thread.  At this point, you're just trolling.

Wash trading is regulated in some markets because of some dumb IRS rules that allow you to write-off losses and force other people (taxpayers) to bear them instead.  Freedom is a much more moral system than subsidized stupidity coupled with an incompetent regulatory regime.

If you actually knew what the value of gold were based on, I would suggest that you buy it.  But it doesn't seem like that is the case, so if you have a use for Bitcoins then it would be in your best interest to use them instead.

Sorry if you think it's trolling that I don't dump my money into Bitcoin because on two production charts sans argument.

same idea/question about gold in many people heads, topicstarter.
or use brokers with deal insurance.

Your original question was about accepting Bitcoin for payment.  Now you seem to want to argue about investing in Bitcoin.

No one is here to give you investment advice.  This isn't Bitcoin Customer Service and I sure as hell am not selling any.  So the only reason I'm "wasting my time" with you at this point is because you accused me of trying to rip people off.

If you are concerned about "market manipulation", then you are free to create an exchange that attempts to prevent it.  Otherwise, Bitcoin is backed by nothing so Caveat Emptor.

Excuse me, but where did I accuse you of ripping people off? Please use the quote function and show me where I personally accused you of ripping people off. Go ahead. I'll wait.

By the way, I like how you put market manipulation in quotations as though you've never heard of it before.

To the good listener, half a word is enough.
If you can't understand the implications of everything that was repeatedly explained here on this topic, I don't think there's much more to be said.

I'm not the one who doesn't understand the implications. Say fellows, what happens to a currency when the greatest demand for it comes not from consumers looking to purchase products or as a store of value, but instead is a bunch of people looking to speculate in the currency?

But since you don't have more to say, don't let the door hit you on the way out. I don't really mind if you stay, but I guess everyone on here is a permanent bitcoin bull no matter what. To be honest, I would be very concerned if one of my assets appreciated in value by ten times in just a month.

That's a pretty wild claim. There are 3 actors in the BTC market: Long term investers, Miners (sellers), and day traders/speculators. Miners are accounted for, so the only unkown is the balance between adopters and speculators.

If you look at the price history, BTC hit $9, quickly fell back to ~$7.5 and is now slowly depreciating, with volumes around 7-15k a day on Gox. The mining speed witnessed for the past 2 weeks is about 10k BTC minted a day, so the figures match, and right now it is very much likely most speculators have exited the market and are waiting for the next press hit that will bring a flow of new investors.

Moreover, I say your claim is wild because it is overly pessimistic to expect a market to be only fueled by speculators, without a base of support, even more on a market you can't down-trade. Those speculators would understand they'd be technically playing poker against each other if they were to be the main market makers, and no speculator wants that.

Bitcoin is not for everyone. I think this forum would be improved if, after answering the question and presenting a case for Bitcoin, we accept that some people still won't want it, no matter what we say here. And it's OK for people to not want Bitcoin.

Can't believe nobody's mentioned that you don't have to weigh or try to figure out "change" for BTC, but I guess that doesn't apply if the transactions you are making are things like investments/land.

I can't imagine trying to pay for my groceries in gold. I can't imagine a minimum wage cashier trying to appraise and then make change for my gold.

I CAN imagine them letting me out the door with an unconfirmed transaction assuming they were standing there watching me send the coins to their address. I can also imagine them requiring my contact information for this transaction, as many stores do when you write a check. Either that, or send the amount of the transaction to a new address and then hand them the private key for it.

There is something very wrong in this thread in literally every post except perhaps 1-2 like this one.
(Gold took what, around 5-7 years to gain 500%, $300 to $1500? BTC went from 1$ to 8$ in a month or two.)

Otherwise we have the same tilting at windmills (coming here and arguing about potential flaws/risks in BTC is like being a PC user and trying to tell mac people that they are paying a 50-150% markup for an ultimately samey/inferior product) as usual.

So don't feel bad. :P
One should maybe try to establish one single generic-thread where in a kind of FAQ fashion these points(and pseudo-counterpoints) that continuously come up time and again are listed, so one can refer to it. :P

I still contend that one way or the other, it will be interesting what the future brings/holds, and just how crazy / interesting the development eventually will be..
Still wild roots right now indeed.


P.S. Woulda expected a bit more unexpected sophistication from someone clearly going the chan route of calling himself DERP and chanting neckbeard. :p

-
Both sides have a point. On the one hand, if enough nutters remain interested, it can run as long as any scheme can(Gold interest is also created and maintained by mostly a shared belief that it has value mostly because people believe it has value. You don't "need" Gold for much of anything. At all. No, really. You don't.).
On the other - deck of cards / wild volatility for the valuation is a very real scenario, too.

you can try to do this but you could easily get screwed.  as you're walking the price up or down, another trader can step btwn your paired wash sale and take you out of your planned position and you'd be stuck.  this is the concept behind high frequency trading.  the manipulators supercomputers can flash orders or execute a manipulated trade faster than u can blink an eye.  they also can get screwed by other HFT's as well though, so its a dangerous game.